What Went Down In The Debate Over Graham-Cassidy

Well, that’s that for Graham-Cassidy (and this live blog). Graham-Cassidy failed for the same reasons the various other Obamacare repeals have: It was too conservative for senators like Maine’s Susan Collins, insufficiently conservative for people like Kentucky’s Rand Paul and written in too much of a slapdash, partisan way for people like Arizona’s John McCain.

“Where we go from here is tax reform. We plan to move forward on our next priority,” Senate Majority Leader Mitch McConnell said, after a lunch with GOP senators in which it became even more clear that Republicans didn’t have the votes to pass Graham-Cassidy.

Some Republicans are still talking about using the 2018 reconciliation bill to do Obamacare repeal, since the 2017 process effectively requires a repeal by Saturday. But I wonder, after so many failed attempts, if this is bluster. Maybe, as McConnell says, Republicans will just move on to tax reform or other issues.

I hate to be morbid about this, but if McCain, who is suffering from brain cancer, were to resign from the Senate or pass away, Arizona Republican Gov. Doug Ducey would appoint his replacement, who would serve until the 2018 elections. I assume Ducey, who supported Graham-Cassidy, would appoint a Republican who backed Obamacare repeal.

And if New Jersey Sen. Robert Menendez, who is standing trial on corruption charges, were to be convicted and then expelled from his office by a two-thirds majority of the Senate, New Jersey Gov. Chris Christie would pick Menendez’s replacement. Christie’s term runs until Jan. 18, and he too would be likely to appoint a Republican who would back Obamacare repeal.

So, Republicans would essentially gain two more “yes” votes for Obamacare repeal. Yes, those are unlikely scenarios, but not out of the realm of possibility.

Congress could pass a bipartisan bill to improve Obamacare, which would be an acknowledgement that the law is going to stay (Anna wrote about this option below).

The Trump administration could just opt to try to implement the law, but in a more conservative way.

Republicans could keep trying to push repeal, even if the last eight months suggest that they’ll keep running into the same problems.

Trump’s team could try to unwind or weaken as much of Obamacare as possible through executive branch actions.

I’m honestly not sure which direction the GOP will take. For one thing, I would not have guessed when 2017 started that Republicans would spend eight months running into the same problems with multiple repeal efforts.

In any case, you’ll notice that “not do anything else on health care” is not among the four paths. Graham-Cassidy may be over, but the battle over Obamacare isn’t.

While the effort to repeal and replace parts of the Affordable Care Act is dead (for now), Graham-Cassidy wasn’t the only bill hanging around the Senate this month. A bipartisan bill meant to shore up the Obamacare marketplaces was also in the works. That effort, led by Sens. Lamar Alexander and Patty Murray, died when Graham-Cassidy gained momentum.

Alexander-Murray may be unlikely to find its way through a highly polarized Congress, but it does address some issues that it will be hard for Congress to ignore. Among them: will Congress fund what are known as cost sharing reductions. Those are discounts that insurers must provide to people buying plans on the Obamacare marketplaces who fall into lower income brackets. A legal fight between Congress and the White House began during the Obama administration, after Congress refused to appropriate money but Obama refunded insurers for those discounts anyway.

Trump has continued making the payments on a month-to-month basis, but the uncertainty around their future has caused insurers to raise their prices for next year. Since insurers must sign final agreements to sell on the 2018 Obamacare marketplaces on Wednesday – tomorrow — there’s hardly enough time to bring those costs back down. Still, the Department of Health and Human Services could still do several things to intervene and stabilize things. That would mean bolstering up a law that it has spent nine months trying to repeal, however.

Yesterday we mentioned a report from the credit agency S&P Global Ratings, which didn’t project a very positive outlook for states in the unlikely event that Graham-Cassidy becomes law. I wanted to know how the agency had accounted for the fact that the law gives states a lot of flexibility, even requiring them to design new approaches to health insurance. The first thing to know, said Deep Banerjee, an analyst with the agency, is that they don’t assume every state will have a different market. “There will be some copying and pasting going on,” Banerjee said. Still, it’s hard to say what those arrangements might be. So when it came to estimating the impact on the health sector, they thought about it in aggregate.

What they did account for, however, is variation in the change to the number of uninsured, and what that might be by state. But even there, a lot of important information is missing, Banerjee said. Graham-Cassidy provides billions of dollars of funding in 2019 and 2020 to help stabilize insurance marketplaces, which will directly impact who has insurance. It’s largely up to either the head of the Health and Human Services or the Centers for Medicare and Medicaid Services to approve how that money is spent. With few details in the bill, S&P was left doing a lot of guessing.

The credit agency also offered its take on one big outstanding question among health policy wonks: How important is the individual mandate, the part of the Affordable Care Act that says most people have to have insurance or pay a fine. It’s one of the least popular aspects of the law, but the Congressional Budget Office, among others, has estimated that without it many more people would go without coverage, a view that has received its fair share of criticism. S&P falls somewhere in the middle, saying that the current mandate is weak anyway, and there likely won’t be a huge impact on coverage if it goes away. “But,” the agency wrote, “a weak mandate is better than no mandate at all.”

Perry Bacon Jr.10:30 AMGraham-Cassidy Is Struggling For The Same Reason The Other Obamacare Repeal Bills Did

This is hard to imagine now, but Maine’s Susan Collins was actually one of the authors of an Obamacare replacement bill back in January. Her co-author? Bill Cassidy of Louisiana.

Cassidy-Collins, as the legislation was called, was billed as giving states flexibility to design their own health care systems — or to keep Obamacare if they chose. So at first glance, Cassidy-Collins sounds like a lot like Graham-Cassidy, which Collins is strongly opposing.

But there were two key differences between Cassidy-Collins and Graham-Cassidy. While liberal groups opposed some of its ideas, Cassidy-Collins did not call for huge cuts in Medicaid spending. And Cassidy-Collins was explicitly described as barring insurers from setting higher prices for people with pre-existing conditions.

In contrast, the Obamacare proposals that Republicans have advanced throughout the year, including Graham-Cassidy, have included tens of billions of dollars of cuts from Medicaid and provisions that gave states broad freedom to set rules for insurance. States, under most of these Obamacare repeal proposals, were not be required to bar companies from charging people with illnesses more.

Collins, in her statement on Monday night announcing that she would not support Graham-Cassidy, gave three reasons for her opposition: Medicaid cuts, inadequate protections for people with pre-existing conditions and potentially increased premiums for some Americans.

The bottom line is this: Reducing spending on government-run health care programs like Medicaid and limiting regulations on insurers (and other businesses) are core parts of the Republican ideology. It is not surprising that GOP officials want to include these ideas in an Obamacare repeal.

But these ideas are unpopular withthe public — and with lawmakers like Collins whose votes are essential to passing anything since the GOP holds such a narrow majority in the Senate.

That is why this process seems like Groundhog Day. Republicans keep writing bills that, while different in other ways, include Medicaid cuts and weaken Obamacare rules on insurers. Liberals howl about these changes. The media writes about how these proposals are likely to negatively affect people with low incomes and with pre-existing conditions. Some more moderate Republicans like Collins and Alaska’s Lisa Murkowski directly criticize these ideas, and others (like West Virginia’s Shelley Moore Capito) are leery of them and won’t commit to voting for the legislation. Changes are made to court these more moderate members, annoying conservatives like Kentucky’s Rand Paul.

The newest version of the Graham-Cassidy health bill was released only on Monday (some reporters got their hands on a copy on Sunday night), meaning that even as the bill verges on collapse, policy wonks are still trying to make sense of what the bill would mean, even in dollar terms, for the states.

Into that vacuum, the bill’s authors released estimates of what they say would happen to states’ finances under the law. Analysts quickly noticed that the estimates use some funny math, however. For starters, they don’t include the drop in federal funding going to each state as a result of a cap on Medicaid spending. That cap would limit how much federal money could be spent on the parts of the program that mostly covers children, pregnant women, the elderly and people with disabilities. Independent analyses have suggested that cap will reduce funding by anywhere from $120 billion to $243 billion from 2020 to 2026.

The GOP estimates also add up how much money states won’t spend on Medicaid expansion and count that as savings. States that expanded Medicaid currently have to pay for 10 percent of the cost of caring for those who became newly eligible for the program, which grew to cover everyone earning under 138 percent of the federal poverty line under the Affordable Care Act. Under the Graham-Cassidy bill, they wouldn’t have to contribute anything. But then the majority of those states would also have less federal money with which to help pay for coverage. In many cases, that will probably mean states will either kick in more funds for Medicaid or let more people go uninsured.

Everyone can tell that Graham-Cassidy is in deep trouble, most notably President Trump. The president tweeted out a video on Monday night that included numerous clips of John McCain attacking Obamacare. McCain, of course, has said he will oppose the Graham-Cassidy bill and voted down an Obamacare repeal in July, so his party’s president is suggesting that the Arizona senator has flip-flopped.

Whatever McCain’s rationale, he and Maine’s Susan Collins have said definitively that they will not back Graham-Cassidy, and Texas’s Ted Cruz, Alaska’s Lisa Murkowski and Kentucky’s Rand Paul all have reservations as well. (Paul has probably registered the strongest complaints, demanding fundamental changes to the bill in return for his support.) If more than two Republicans refuse to back Graham-Cassidy, it won’t pass.

So here’s what to watch for today:

Will a third Republican declare unequivocally that he or she will not vote for Graham-Cassidy, thereby essentially ending this process?

Or will Senate Republican leaders take the hint that the bill is likely dead and stop pushing it, even if a third Republican does not come out as firmly against it? John Thune of South Dakota, the No. 3 Republican in the Senate, has already admitted that the situation is bleak.

Or will Senate Republican leaders insist on a formal vote, forcing McCain, Collins and at least one other GOP member to publicly stand against the repeal of Obamacare, one of the Republican Party’s top priorities for almost a decade now?

Perry Bacon Jr.6:51 PMGraham-Cassidy Is Basically Dead — And Its Death Could Be Announced On Tuesday

Susan Collins’ rejection of Graham-Cassidy on Monday night — combined with John McCain saying last week that he can’t vote for it and the strong objections of Kentucky’s Rand Paul — suggest that the Graham-Cassidy bill repealing Obamacare is basically dead.

Collins and McCain have outright said that they will not back the bill, and Paul has been dismissive too, if not quite unequivocal. A slew of changes made on Sunday night, intended to woo both more moderate Republicans like Alaska’s Lisa Murkowski and conservatives like Paul, don’t appear to have moved these skeptical senators toward backing the bill.

As of Monday at about 7 p.m., nearly 24 hours after the Graham-Cassidy changes started to circulate, the math remains essentially the same as at the end of last week: Republicans need the support of 50 senators (in the event of a tie, Vice President Pence would cast the deciding vote). They have at most 45, with Collins and McCain gone and Texas’s Ted Cruz joining Murkowski and Paul in saying he’s not on board.

Some Senate Republicans are now openly discussing the possibility of not holding a vote on Graham-Cassidy, as it seems doomed to fail right now. Senate Majority Leader Mitch McConnell has not committed to holding a vote this week. GOP senators have a weekly Tuesday lunch that may give him a time to canvass the members, determine that this provision does not have 50 votes and opt against pushing it forward.

But a note of caution: Obamacare repeal keeps being declared dead, and the Republicans keep reviving it. It’s hard to see Graham-Cassidy passing by Sept. 30, as Senate Republicans hoped. But I don’t want to rule out the possibility of some new repeal bill emerging — maybe even before the 30th.

Sen. Susan Collins of Maine has announced that she’s firmly against the bill. Combine that with the opposition from Sen. John McCain and Sen. Rand Paul of Kentucky, this particular bill is looking not long for this world.

The Congressional Budget Office, sometimes called the official scorekeeper for Congress, is out with its much awaited estimate on the impact of the Graham-Cassidy bill. It’s a rough estimate, not a full score, which the agency says will take weeks to finish. The report is pretty vague as a result: We can tell you that millions more people will be uninsured, but we haven’t had enough time to say how many.

When it comes to dollars, there’s a little more detail, however. The agency estimates, for example, that about $1 trillion less will be spent on Medicaid from 2017 to 2026 than under current law. It also thinks the federal government will spend about $133 billion less on health care overall during that time (important because the bill needs to save around that much money in order to comply with the rules of reconciliation, which allow the Senate to pass the bill with 51 votes instead of 60).

A lot of the reduction in insurance coverage would come from those cuts to Medicaid, as well as the loss of subsidies for people with lower-incomes and the end of the mandate that requires most people to have insurance or pay a fine. And the decrease would be particularly large in 2020, after the Medicaid expansion and subsidy funding ends and new block grants begin. That’s partly because states will have so little time to sort out how to spend that money that it’s likely to be a messy rollout, which would leave a lot of people uncovered in the process.

And last, but certainly not least, the CBO thinks that leaving the current regulations on insurance markets in place but reducing the funding that helps people pay for it would lead to an “unsustainable spiral.”

For starters, it points out that a lot of job growth currently comes from the health sector, and fewer insured people (which is expected under the bill) means fewer jobs. S&P estimates there will be 580,000 fewer jobs by 2027 if the bill becomes law.

The agency also echoes what many health policy analysts have been warning: “The lack of adequate funding makes flexibility a costly venture for the states.” Translation: The bill would give states a lot more flexibility over how they run their insurance markets, but that flexibility would come at the expense of dollars — lots of them in the case of some states. That is likely to put not only a financial burden on the states themselves, but also create a growing disparity in health coverage between people living in different parts of the country.

Ron Wyden, the top Democrat on the Senate Finance Committee, asked Cassidy “yes or no,” if people could be charged higher prices by insurers under Graham-Cassidy if they had pre-existing conditions. Cassidy twice sidestepped the question. Health care experts believe the answer is “yes.”

More from the Senate Finance Committee’s Graham-Cassidy hearing: If you were looking to prove the thesis that “all politics is identity politics,” this hearing might back you up.

Funds for Medicaid would be cut in Graham-Cassidy, and Planned Parenthood would be barred from being paid by the federal government for any services it provides Medicaid recipients. (Medicaid recipients are disproportionately non-white, and Planned Parenthood largely serves women.)

Perry Bacon Jr.5:10 PMCassidy And Graham May Be Looking Beyond This Week On Obamacare Repeal

The Senate Finance Committee is still holding its hearing on the Cassidy-Graham health care bill (the only hearing on the bill Congress is set to hold). What will probably get the most coverage happened before the session really started: people crowded into the hearing room, many in wheelchairs, shouting “No cuts to Medicaid! Save our liberty.”

But something else has struck me …

Senators don’t often testify at Senate hearings. But Lindsey Graham of South Carolina gave a fiery defense of the bill he co-wrote, with Democrat Mazie Hirono of Hawaii then testifying against it. She spoke about being diagnosed with kidney cancer and suggested that this legislation would not do enough to help cancer victims like herself.

Senators, at least in my experience, almost never testify in front of committees on which they sit. But Bill Cassidy of Louisiana opted to leave the dais and instead defend his bill, taking questions from his fellow senators.

You probably don’t care about Senate traditions. But Cassidy and Graham’s aggressive defense of this bill and the need to get rid of Obamacare made me think that this fight probably won’t be over even if this bill fails, and even after the Sept. 30 deadline for the 2017 reconciliation bill. Republicans could try to use the 2018 reconciliation bill to repeal health care too — it’s just hard to see them not keeping the door open for another attempt at Obamacare repeal.

It’s not just that Republican activists want to repeal Obamacare. Or that President Trump wants to sign something called “repeal and replace.” Republican members of Congress, I think, are convinced that they must end Obamacare because it is a truly flawed law.

Like Perry said, there’s a lot going on in the revised version of the Graham-Cassidy bill that was leaked to some press Sunday night (an even newer version was released Monday morning). There’s a lot of complicated stuff in there that health policy analysts and legal experts are still trying to sort out. And these aren’t mere details — they include questions about how and to what extent states can waive insurance regulations that protect people with pre-existing conditions from being priced out of coverage. It’s also likely that more changes to the bill will be announced throughout the week.

Still, while those things are sorted out, there are some things we do know about the legislation. To elaborate a bit on what Perry said, the way the bill stands now it …

… effectively gets rid of the mandates that most people have insurance and that most businesses offer insurance to employers by getting rid of the fines attached.

… ends Medicaid expansion (which covers everyone earning below 138 percent of the federal poverty line in states that chose to expand).

… ends the subsidy system for people buying insurance on the private Obamacare marketplaces.

… replaces Medicaid expansion and subsidies with lump sums of money (called block grants) for which states can apply. That funding will generally be less than current funding for states that expanded Medicaid, like New York and California, and more for states that did not — though there are some notable exceptions, and there are no official or even independent estimates yet.

… gives states just two years to figure out what to do with that money, and also set up whatever system they decide on. States could do a variety of things, like help people with pre-existing conditions buy insurance, or help people with low-incomes pay for coverage.

… allows states to get rid of many regulations on insurers. They could allow insurers to charge people with pre-existing conditions more, or get rid of limits on deductibles. They could also waive the requirement that insurers cover a comprehensive set of different services, allowing companies to sell skimpier plans.

… it puts the remaining parts of Medicaid — which primarily covers people with disabilities, pregnant women, children and the elderly — on a budget. Avalere, a D.C. consulting firm, estimates that the states would receive about $120 billion less for Medicaid from 2020 to 2026.

… prevents federal funding to Planned Parenthood for a year.

… opens up $10 million and $15 million in 2019 and 2020, respectively, to help stabilize insurance markets.

States that took advantage of Medicaid’s expansion under Obamacare have far more to lose if the program sees deep cuts. In West Virginia, for one, enrollment increased 13 percentage points from 2013 to 2016.

Just how confusing has this latest GOP repeal process been? Well, America, we apparently can’t even spell the name of one of the authors of the bill. For a period Monday afternoon, #GrahamCasiddy was trending in the Washington, D.C., area. Sens. Chris Murphy of Connecticut and Chuck Schumer of New York made the mistake.

Rachael Dottle3:46 PMThe Uninsured Rate By State — And How It Has Changed

The health care debate is sometimes hard to follow, in part, because the debate about Graham-Cassidy is unfolding amid a longer-term debate about Obamacare. So, we’ll pop into this live blog over the next few days with charts about the Graham-Cassidy bill itself, but also on the effects of Obamacare. The chart above, for example, shows the estimated change in the uninsured population by state. Between 2013 and 2016, the share of uninsured people decreased in every state, primarily as a result of the Affordable Care Act. The national share fell from 14.5 percent to 8.6 percent.

So we know some basics about Graham-Cassidy and what to expect this week (as laid out below), but what don’t we know? Well, a lot … We don’t know …

… exactly what will be in the final version of Graham-Cassidy, both because reluctant senators might request changes and because the Senate parliamentarian might determine that parts of the legislation violate reconciliation rules and must be stripped from the bill.

… the bill’s precise effects on Americans. The Congressional Budget Office has already said that it cannot complete a full, comprehensive report on this legislation — one that estimates how many people will be insured if it is enacted and whether premiums will go up or down — before Sept. 30. That is, in part, because the bill is difficult to evaluate; the budget office has to predict what states will do with their newfound freedom under this law.

… if or when the legislation will be voted on. Republican leaders in the Senate may choose not to schedule a vote if they don’t think it will pass.

The sole congressional hearing for Graham-Cassidy was scheduled for 2 p.m. today. It was turned into … wow. I’m watching on C-SPAN as people, mostly in wheelchairs, chant, “No cuts to Medicaid! Save our liberty.” And Capitol Hill police officers are removing them from the room.

As I mentioned, there are a bunch of ways the GOP effort to repeal Obamacare could end this week. There’s still a lot we don’t know. We do know some things, however. For now, I’ll stick with the general principles of Graham-Cassidy — rather than going into the details — because Republican senators unveiled a series of changes on Sunday night to court more support and analysts are still trying to figure out exactly how the latest changes will affect both consumers and states. Senate Republicans, moreover, seem open to making more changes to the legislation in an effort to woo members who are still leery of it.

We know that Republicans have a piece of legislation that would take most of the money given to people and states under Obamacare’s fairly precise rules and give those dollars to states with very few rules, letting the states figure out how to spend it. The legislation would also cut Medicaid spending by tens of billions of dollars, so there would be fewer dollars overall.

Even with the latest changes to the bill (designed to make it a better deal for red states represented by key GOP senators), Graham-Cassidy is projected to take away federal dollars from states like California and New York that enthusiastically embraced Obamacare’s expansion of Medicaid spending and insurance marketplaces. (What’s unclear is if red states with those key swing senators, like Alaska, will come out ahead.)

The second thing we know for sure is that it will be a bit harder for Republicans to repeal Obamacare after this week. Republicans adopted a 2017 budget resolution earlier this year that created the framework for passing health care with 51 Senate votes (including Vice President Mike Pence’s potential tie-breaking vote), instead of 60, through the so-called reconciliation budget process. Under that resolution, Republicans must pass an Obamacare bill by Sept. 30.

But that is a soft deadline, not a hard one. The GOP could adopt a 2018 resolution that also aims to pass health care through reconciliation. Why would they not do that? Well, after spending eight months struggling to repeal Obamacare, the Sept. 30 deadline could give Republicans an exit ramp. They could opt to move on from Obamacare and focus the 2018 budget process exclusively on tax policy. (I’m skeptical that congressional Republicans will move on from repealing Obamacare, for reasons laid out here and here.) The bottom line: Be wary of claims, if Graham-Cassidy goes down, that the effort to repeal Obamacare is over.

Welcome to another Obamacare repeal live blog. (Well, let’s say “mostly live” — we’ll ramp the pace of coverage up and down as events unfold.)

Republicans could take a decisive step this week toward passing an Obamacare repeal … or add another failed attempt to their legislative record. This month’s version of Obamacare repeal, known as the Graham-Cassidy bill, is teetering on the edge of collapse, with at least five Republicans expressing deep reservations about it. At the same time, Republicans in Congress still really want to repeal Obamacare.

So this week could unfold in many ways. Most likely — at least based on what we know now — we will end this week with a somewhat inconclusive outcome: Republicans don’t pass an Obamacare repeal but don’t give up on doing it later.

But that’s speculative. Stay tuned, and we’ll see how it unfolds together. And if you have any questions about the health care debate, this process or the politics surrounding it, send them to @538politics. We’ll answer as many as we can.